How Do Heat Pumps Work? Simple Guide for Homeowners

A heat pump heats your home by extracting warmth from outside (either from the air or the ground) and concentrating it to a useful temperature indoors. It works like a fridge in reverse, using a small amount of electricity to move a large amount of heat, making it two to four times more efficient than a gas boiler.

Air Source vs Ground Source Heat Pumps

The two main types of heat pump used in UK homes are air source and ground source. Both use the same underlying principle but draw heat from different places.

Air Source Heat Pumps (ASHPs)

An air source heat pump sits outside your home and absorbs heat from the ambient air, even when temperatures drop below freezing. ASHPs are the most popular choice in the UK because they are cheaper to install and do not require extensive groundwork. A typical installation for a three-bedroom semi-detached house costs between £10,000 and £16,000 before grants. After the Boiler Upgrade Scheme grant of up to £7,500, the net cost can be as low as £4,000 to £8,500.

Ground Source Heat Pumps (GSHPs)

A ground source heat pump uses a network of pipes (called a ground loop) buried in your garden either horizontally in trenches or vertically in boreholes. Because the ground stays at a steady 8–12 °C throughout the year, GSHPs deliver more consistent performance than air source models and typically achieve higher efficiency ratings. The trade-off is cost: installations usually range from £20,000 to £35,000 before the BUS grant. They are best suited to properties with large gardens and high heat demand.

How the Refrigeration Cycle Works

Despite the name, a heat pump does not generate heat. It moves it. The process relies on a refrigeration cycle with four key stages:

1. Evaporation. A liquid refrigerant passes through an outdoor heat exchanger (the evaporator). Even cold outside air or ground warmth is enough to boil this refrigerant into a gas because its boiling point is extremely low (around −25 °C to −40 °C).
2. Compression. An electrically driven compressor squeezes the low-pressure gas into a much smaller volume, which raises its temperature significantly, often to 50–75 °C.
3. Condensation. The hot, high-pressure gas flows through an indoor heat exchanger (the condenser), where it releases its heat into your central heating circuit or hot water cylinder. As it gives up heat, the refrigerant condenses back into a liquid.
4. Expansion. The liquid passes through an expansion valve, which drops its pressure and temperature back down, ready to absorb heat from outside again.

This cycle repeats continuously. For every 1 kWh of electricity the compressor uses, a well-installed system delivers 2.5 to 4 kWh of heat, a ratio known as the Coefficient of Performance (COP). Over a full heating season, the average is called the Seasonal Coefficient of Performance (SCOP).

Running Costs vs Gas Boilers

A modern condensing gas boiler is roughly 90 % efficient, meaning you get about 0.9 kWh of heat for every 1 kWh of gas burned. A heat pump with an SCOP of 3.5 delivers 3.5 kWh of heat per 1 kWh of electricity. Even though electricity costs more per unit than gas (roughly 24.5p vs 6.8p per kWh on the April 2026 Ofgem cap), the heat pump's efficiency advantage means running costs are broadly similar, and often lower once you factor in the higher standing charge for gas.

For a typical three-bedroom home using 12,000 kWh of heat per year, annual heating costs work out to roughly £840 with a heat pump (SCOP 3.5) compared to around £910 with a gas boiler. The gap widens further if you generate some of your own electricity with solar panels or benefit from a time-of-use tariff.

Common Myths Debunked

“Heat pumps don't work in cold weather”

This is the most persistent myth. Modern ASHPs are tested and rated to operate at temperatures as low as −15 °C to −20 °C. Countries with far harsher winters than the UK (Norway, Sweden, Finland) have some of the highest heat pump adoption rates in the world. The key is correct sizing: a system designed for your home's heat loss will cope comfortably with British winters.

“You need underfloor heating”

Underfloor heating is ideal because it runs at low flow temperatures that suit a heat pump perfectly, but it is not essential. Many homes run heat pumps with standard radiators. In some cases, a few radiators may need upsizing to compensate for the lower flow temperature. A good installer will carry out a room-by-room heat loss calculation and tell you exactly what is needed. See our guide to the best heat pump brands for models that perform well at higher flow temperatures.

“Heat pumps are too noisy”

Outdoor units typically produce 40–55 dB(A) at one metre, comparable to a quiet conversation or a household fridge. Permitted development rules in England require the unit to meet a 42 dB(A) limit at the nearest neighbour's boundary. In practice, most installations are barely noticeable from a few metres away.

When Is a Heat Pump Right for Your Home?

A heat pump is a strong choice if your home has reasonable insulation (an EPC rating of D or above), space for an outdoor unit or ground loop, and a wet central heating system (radiators or underfloor heating). Properties with solid-wall construction, single glazing or very high heat loss may need insulation upgrades first to get the best performance and lowest running costs.

A heat pump may not be the best fit if you live in a flat with no outdoor space for a unit, if your property is listed and restrictions prevent external installations, or if your electricity supply is limited and cannot support the compressor's demand. In these situations, a hybrid heat pump or alternative low-carbon heating system may be more appropriate.

Grants and Funding

The Boiler Upgrade Scheme offers up to £7,500 towards the cost of an air source or ground source heat pump in England and Wales. The grant is applied directly by your MCS-certified installer, so you never need to pay the full price upfront. Scotland has its own Home Energy Scotland grant and loan scheme offering similar support.